2009 PLP 900 (YLR)

Brief facts of the case are that appellant filed a suit for declaration and permanent injunction against the respondents company. The learned Judge Banking Court No. II vide order dated 5-12-2006 along with 21 other cases filed by the. respondents leasing company, keeping in view clause 13.02(c) of the agreement held that appropriate Court at Rawalpindi has the jurisdiction to adjudicate upon the matter, therefore, directed to return of the plaint under Order VII, rule 10, C.P.C. for its presentation before the proper forum. Appellant is aggrieved of the same.

2. It is contended by learned counsel for the appellant that the entire cause of action had accrued at Multan, parties reside at Multan, merely by induction of a clause in the agreement, parties can neither confer nor curtail jurisdiction of the Court.

3. On the other hand, learned counsel for the respondent has relied upon State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem (1987 SCMR 393), Zaib Cold Storage and Ice Factory through Sole Proprietor and another v. Messrs Pakistan Industrial Leasing Corporation Limited (PILCORP) (2006 CLD 67) and Banking. Equity Ltd. v. Iqas Weaving Mills (Pvt.) Ltd. (2001 CLC 169), to contend that parties can validly enter into an agreement to get their disputes resolved from a particular Court. It is further argued that lease agreement was executed at Rawalpindi where head office of the respondent is also situated.

4. We have considered the arguments of the learned counsel for the parties.

5. Relevant portion of the judgment of the Hon'ble Supreme Court reported as 1987 SCMR 393 is reproduced for advantage:- "It is evident from a plain reading of these provisions that there is no absolute exclusion of jurisdiction under section 9 or section 10 of the Code of Civil Procedure nor there is any violation of the provisions of section 28 of the Contract Act when two or more courts have jurisdiction to try a suit and the parties mutually agree to choose or take their dispute to one of them. The Civil Courts exercise their jurisdiction under the Code of Civil Procedure. If they do not possess such jurisdiction under the Code it cannot be conferred on them through a mutual agreement of the parties to a dispute. But in a situation where two or more courts have jurisdiction to try a suit under the Code of Civil Procedure, then an agreement between the parties that any dispute arising between them shall be tried only by one of such courts could not be considered contrary to public policy as it would neither contravene the provisions laid down in section 28 of the Contract Act nor would it violate in any manner the pro-visions of section 9 or section 20 of the Code of Civil Procedure."

6. Crux of the matter resolved by their lordships in the Hon'ble Supreme is that if under the law two or more courts have the jurisdiction to entertain a lis under an agreement then the parties to the agreement can by mutual settlement decide to get the lis, resolved from one of those courts who have the jurisdiction. It is also resolved by their lordships that if the court agreed by the parties is not having jurisdiction under the law, then the parties by mutual consent cannot confer jurisdiction on such Court. In the case 2006 CLD 67, the lease agreement was signed at Lahore therefore it was observed that a partial cause of action had arisen at Lahore as well apart from Sialkot, therefore, their lordships in the Division Bench were of the view that by agreement parties could agree to resolve their disputes in the courts at Lahore. Similar is the view of the learned Single Judge in case 2001 CLC 169 who is author of the judgment of 2006 CLD 67.

7. In the instant case, we have gone through the agreement which was claimed by the respondent to have been executed at Rawalpindi, the same does not show of its execution at Rawalpindi rather it indicates that the same was executed, signed and stamped at Multan. All other necessary ingredients of section 20 of the C.P.C. and as indicated by the learned counsel for the appellant had also taken place within the territorial jurisdiction of Multan courts. Learned counsel for the appellant has failed to point out anything which could even remotely suggest that any partial cause of action had taken place at Rawalpindi.

8. For what has been stated above, we hold that since none of the ingredients of section 20 are available in the instant case by way of which it could be said that Courts at Rawalpindi had the jurisdiction to entertain the lis between the parties to the agreement, therefore, clause 13.02(c) of the agreement cannot be enforced under the law. The condition precedent to make a choice from among two or more courts of one court by the parties through an agreement is thus that all the courts including the one chosen by the parties has the jurisdiction under the law. If the chosen court does not qualify this test of jurisdiction, then such agreement cannot confer jurisdiction on such court. Resultantly, this appeal is allowed, impugned order dated 5-12-2006 to the extent of the appellant is set aside. The learned Banking Court is directed to proceed with the trial in accordance with law. M.B.A./M-35/L Appeal allowed.